Make It, Keep It - Debt Vs Cashflow
I recently attended Arizona 2011 - Real Estate and Business forecast which had a number of excellent featured speakers including Elliott Pollack, renowned economist from the Phoenix area. I'd like to share with you the overall sentiment as well as the analysis of various real estate and business sectors. First Elliott started of the show with his signature analysis of the local, state and national economy. The overall consensus was that we're looking at another year of stagnation in 2011. In other words, 2011 will resemble 2010 in most ways - abysmal. The year of year improvement will be minuscule. As we move forward, 2012 will be better than 2011 and so forth but we won't see an marked improvement and substantial growth until 2013-14 when things should start to return to normal. Everything is predicated on the national economy improving and while there are signs that things are improving ever so slightly, we are still a few years away on that front as well. Of course, so much is dependent on what happens nationally and even more so, globally with the economy. Elliott went on to point out that Phoenix has historically suffered from emphatic boom-bust cycles and that we are poised for another boom cycle. All the indicators point towards to future population and employment growth as we move forward which will support our housing market.
Moving on to some of the other speakers and specific real estate market segments, the consensus was that residential housing is near or at bottom. Will probably get slightly worse next year as more foreclosures hit the market and must be absorbed. But we are already at rock bottom pricing so can't go much lower. This means another year of tremendous housing affordability and ability to find incredible value for housing and investment.
Be sure that your investment makes financial sense. Your initial concern should be whether your investment will earn you any gains. How long does it take? What type of financial jeopardy will you be in?
Quite a number of years ago, we sat down and tried to work out what might be the best way to create a passive income through property and then how we would sustain that wealth and effectively apply the MIKI.
Apartment financing is available and getting better. Industrial is the next real estate asset class that is set to recover. Still a couple of years away, but there are signs that it is bottoming out and positive absorption is starting to edge down vacancy rates. Retail and office are still light years away from recovery and should only be touched by the most experienced and knowledgeable investors.
Partnership agreements prepare you for many of the issues that will arise in your business, including but not limited to: the reason for your investment, the structure of your company's management, all tax concerns, what will be done with any gains, insurance, and how disagreements will be managed.
All research aside; your investment might still result in nothing. Real estate markets are erratic, and this can result in major changes to income over brief amounts of time. Because of this, it is better to keep in mind the old adage "buyer beware". Speculating in this industry is never a wise move if it will be your primary source of income.
If you have thought through all the issues raised here, then you should be well versed on partnerships, risk, and investment gains. Moving forward, you will need to employ both a CPA and a lawyer to help on tax concerns and partnership agreements. If you've thought of all the concerns raised here, you should be prepared for anything.
Article Source: FxTradingStock.com
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Paul Amos His latest website is about Find great Mortgage Refinance rates and mortgage Refinancing programs
by: Paul Amos
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Date: Sat, 25 Dec 2010
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